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Some Benefits of 203K Loans

By Preston Ware

Waiter, I would like a 203K loan with that short sale.

Why not? It's not a tall order. I'll just have a new kitchen and bathroom with that order.

The 203K is one of my favorite loans because the customer gets home ownership and the added bonus of putting their artistic signature on the property right from the get-go. The 203K is a home improvement loan that is great for neighborhood revitalization. I remember way back when when I built my house via construction perm it was fun acting as both the designer and the purchaser. You get kind of the same thing with the 203K, but in this case you are only fixing the kitchen or the bathrooms or something along those lines. For a list of what is eligible and what is not eligible under a 203K loan, read more here: http://www.prestonware.com/FHA203Kmortgageflorida.

The 203K allows for up to $35,000 in certain types of home improvements for both purchases and refinances. Personally, if I went through the trouble of the short sale process, I would insist on this loan because in most cases the property gets compromised a little bit and home improvements are needed. $35,000 allows for a lot of rehab for your new home.

The 203K is a FHA loan product, but there are some adjustments to pricing for the program. The closing costs are about $300 higher because an inspection or two will be needed, but the rate is probably on average only .5% higher than a regular FHA loan: say the rate is 4.0% , the 203K would be around 4.5%. There are many variables that go into this pricing, but you get the idea.

Here is a helpful site that explains the 203K program and the necessary contacts in Palm Beach County: http://www.palmbeachcounty203kprogram.com/.

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